10 Actionable Tips on How to Measure Employee Performance

Like many other HR professionals and managers, you have probably read countless articles on how to measure employee performance, difference scales to use and the type of feedback you should give. While these may all be useful; as a manager, it can be difficult to measure employee performance as you most likely don’t work in very close contact with your subordinates on a daily basis. Therefore, many managers cannot answer the question: what is it exactly that I’m supposed to be measuring? If you work in sales, this type of performance measurement is easy, as the question becomes: have they met their targets for this month/quarter, etc.? If you do not work in sales then the question becomes somewhat cloudier. What is good performance, and how do I measure it? This article creates ‘key indicators’ which demonstrate the value, and performance of each individual employee.

Key Indicators

Execution

No there are no decapitations involved in employee performance. Capital punish died out long ago. Instead execution in performance refers to a person’s ability to live up to the work commitments they have made. In other words, targets must be completed; they must be done on time and at a high level.

“Ideas are easy. It’s the execution of ideas that really separates the sheep from the goats” – Sue Grafton.

Quality

While the execution of the task at hand is important, so too is the quality of the work produced. Depending on the role of the employee being evaluated, the quality of this work can be evaluated from a number of sources client reviews, the extent of their role in client efforts, best practices, feedback from the client as well as feedback from peers.

“Meritocracy is a good thing. Whenever possible, people should be judged based on their work and results, not superficial qualities” -Eric Ries

Creativity

Creativity is possibly the most important factor when measuring employee performance. When evaluating an employee’s creativity; you must ask yourself the following questions: when was the last time that this employee thought outside of the box to solve a problem? Does he/she challenge opinions, and established ideas? Is he/she innovate and creative in the production of their work?

“There is no innovation and creativity without failure. Period” – Brene Brown

Improvement

Stagnation is the antithesis of success. In order to succeed, a company must be continually improving, reaching higher, smashing barriers and pushing limits. The same goes for employees. While excellence is important when hiring new employees, improvement of a continuous basis is more important. An employee that improves and betters him/herself, is very valuable to your company, as they contain the passion and drive your company needs to thrive.

As the last point indicated, continuous improvement is vital to the long-term success of a firm. Feedback from peers and customers can inform, direct and stimulate such continuous improvement. While positive feedback is, of course, valuable, suggestions on improvements from peers and customers alike can be highly valuable when uncovering knowledge gaps and planning to coach for your team. Many companies struggle to implement an open and transparent ‘feedback culture’ within the workplace. There are many apps on the market that can help you to boost levels of employee communication and nurture an honest feedback culture.

“I think it’s very important to have a feedback loop, where you’re constantly thinking about what you’ve done and how you could be doing it better. I think that’s the single best piece of advice” – Elon Musk.

Revenue/Targets

While revenue generated, and adherence to fiscal targets can be used as an important measure of employee performance, it is, depending on your company; or your role, unquantifiable or irrelevant. If you work in sales, you can easily see if the members of your team have reached their targets. If your company or team has a different focus; goals can be used as a means to gauge the progress of individual employees.

“One way to keep momentum going is to have constantly greater goals” – Michael Korda.

Responsiveness to Feedback

Feedback is useless unless it breeds some sort of action. The best result any manager can hope for is for their employee to listen to the feedback they receive, and not just implement it, but stop and think about it rationally. Perhaps something can be gleaned from this feedback, or maybe it is not applicable; but either way, feedback should prompt a conversation to discuss both the merits and pitfalls of a certain action.

“One of the things I’ve learned is to be receptive of feedback” – Ben Silbermann.

Ownership

An employee who can take ownership of a particular task and complete it is an asset to any company. This can free up the workload of managers, prevent micro-managing and enable employees to have greater autonomy in their role. This type of employee is particularly valuable to younger, start-ups; as they can typically overcome problems on their own, overcome roadblocks as well as requiring less supervision and reinforcement; thereby making them incredibly valuable to the fledgling company.

“What I always say is, ‘Do every job you’re in like you’re going to do it for the rest of your life, and demonstrate that ownership of it” – Mary Barra.

Time Management

Time management is an important skill to look at when evaluating an employee’s performance. While quality is, of course, more important than quantity, so too is the timeliness of the work completed. It is important that an employee can adhere to time limits and schedules as laid out by managers or working guidelines.

“A goal without a plan is just a wish” – Antoine de Saint-Exupéry

Limitations

Regardless of the size or scale of a company’s operations; employees must learn to work in accordance with limitations with relation to time scale and budget restrictions. It is important to evaluate each project and determine the employee’s contribution to the project; was the project completed on time? Did the employee’s contribution aid in the project’s completion in a timely manner? Was the project carried out in the most efficient manner? Could money have been handled differently; and if so what savings could be made next time? This way you can weed out underperforming employees who are being carried by the good work of others.

“The cold harsh reality is that we have to balance the budget” – Michael Bloomberg.

When the time comes to sit down and write the bi-annual or quarterly reviews, many managers struggle to measure performance. While there are plenty of articles on what type of feedback to give; in terms of how to present it to the employee, the type of language you should use, and whether to start with strengths, or just jump straight into the weaknesses; there is much less available material on what individual factor or determinants of good performance are being measured. This article can provide you with some direction and aid you when compiling your next round of employee performance reviews.

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